A new form of economic governance for the EU is needed so that Europe is better prepared for future crises and to ensure the success of EU2020, the EU's growth and jobs strategy, said MEPs on Wednesday. They also called for more concrete targets to be inserted into the EU2020 strategy, including a 3% GDP target for R&amp;D spending, binding goals for greenhouse gas emissions and a 50% reduction in EU poverty.

These recommendations were set out in two resolutions adopted by MEPs following debates with the Commission and Council. The resolution on economic governance was adopted by 507 votes to 91 with 29 abstentions, while the resolution on the EU2020 strategy was adopted by 562 votes to 57 with 24 abstentions.

Reforming economic governance

The new economic governance model must have the Commission at its centre and should be based on a carrot and stick approach, rewarding good performance and penalising recalcitrant Member States, says Parliament. To gain the required legitimacy, this model must be built through a closer involvement of the European Parliament and national parliaments.

MEPs argue that emerging from the financial crisis will require a model of economic coordination based on the Community method and not intergovernmental cooperation. The setting up of a European Monetary Fund is also proposed. Finally, the resolution states that the Eurozone's stability will depend on bold economic governance focused not just on monetary policy but also on the social dimension.

Specifically on the running of the EU2020 strategy, MEPs warn that more binding rules are needed to replace the open method of coordination. They criticise the Member States for their lack of ambition so far and call for more detailed plans to be submitted by the Commission to the Parliament regarding the implementation of the initiatives.

Budgetary coordination is seen as crucial within the wider picture of economic governance. MEPs insist that greater compatibility and complementarity is needed between Member State budgets and the EU budget. They also argue that Member States should be required to develop economic and spending policies focused around overall EU goals and not only national interests.

EU2020: more concrete targets

More concrete targets should be inserted into the EU2020 strategy, says Parliament. These should include a 3% GDP target for R&D spending, binding goals for greenhouse gas emissions and a 50% reduction in poverty in the EU. In the field of education, MEPs urges the Council to set a 100% target for secondary education and a school drop-out rate below 10%.

Insisting on the completion of the internal market for the success of the Europe 2020 strategy, MEPs also indicate that high quality employment should be a key priority of any such strategy and call for a new agenda to promote decent work.

On spending, MEPs raised the alarm that the "flagship" programmes of the EU2020 strategy do not have sufficient funding from the draft 2011 budget and suggested options for remedying this.